If you find yourself making an offer on house that is listed a bit above where you think its value lies, you might find yourself thinking through which you want more... the house... or a good price.

For example... let's say you've found a house you'd like to buy, and it's listed for $450K. When we look at recent comparable sales, we believe it's really worth something closer to $440K. So you want to offer $430K, because... why not start low and negotiate up?

This makes sense... until it doesn't...

If you offer $430K, a few things could happen. You might land somewhere between your offer price and the list price, perhaps around $440K, right where you thought the value was. Great! But... before countering to your offer, the seller will likely (reasonably) let other showing agents know they've received an offer, which might cause another buyer to make an offer closer to the list price.  Suddenly someone else offers $445K or $450K and the next thing we hear is that the house is under contract.

If you offer $440K instead, you're not leaving as much room to negotiate down - and you might end up paying $445K, a little more than you think the home is worth. But... your odds of actually getting the house go up. The seller will hopefully go ahead and negotiate with you and won't be quite as likely to try to fish for other stronger alternative offers.

So which is right?

As usual, it depends.... on how much you love the house... and how much you believe a few thousand dollars actually matters to you within the context of how long you plan to be, or hope to be, in the house.

Either offer strategy can be a reasonable path forward (depending on your goals, and the particular house) - but they may have different outcomes.